VOL. 125 | NO. 79 | Friday, April 23, 2010
Linebarger Sued For Charging Delinquent Taxpayers Over 10% Attorney Fees
By Andy Meek
A new class action lawsuit has been filed over the practices of a Texas law firm that’s been under fire for years over the way it collects delinquent taxes from Memphis taxpayers.
Two local attorneys filed the suit against Linebarger, Goggan, Blair & Sampson LLP, which won a no-bid contract in 2004 from former Memphis Mayor Willie Herenton. Attorneys Frank Watson and Don Donati filed the suit Thursday in U.S. District Court for the Western District of Tennessee.
Last month, two other local attorneys filed a class action suit against the city in Shelby County Chancery Court over the same issues. And the claims in both actions are roughly the same.
Shelby County government collects its current and delinquent taxes in-house. The city of Memphis treasurer’s office collects current taxes, while Linebarger picks up the city’s delinquent taxes.
After winning its contract in 2004, Linebarger hired local lawyers, including a former employee in the city of Memphis attorney’s office who previously did the same job for the city.
Linebarger makes its money from the Memphis contract by collecting fees on top of the delinquent taxes it collects.
The firm has had a few PR black marks to contend with. It has been widely reported that one of the firm’s partners pleaded guilty six years ago to being part of a bribery scheme to win a San Antonio city contract for Linebarger to collect certain fees on behalf of the city.
Both local federal suits allege Linebarger is piling fees, penalties and other costs onto tardy taxpayers, although the suits claim taxpayers are only supposed to be charged, at most, a 10 percent attorney fee.
The new suit against Linebarger asks for damages that include compensatory damages for class members and punitive damages.